The economics of a cloud based case exchange solution


Inefficiencies in communications – be it patient-physician or physician-physician communication can be expensive to healthcare organizations in several ways. Healthcare Providers (HCPs) striving to enhance referral relationships and thrive in a competitive market need to ensure that their PCP (Primary Care Provider)-Specialist communications are smooth and timely. One part of these communications is how patient information is shared and distributed, especially when providers are geographically separated. Investment in technology and tools that can vastly aid distribution mechanisms and simplify communications can be a sound long term choice for HCPs.

Some organizations still rely on less efficient means such as CDs, Virtual Private Networks (VPNs) and faxes to distribute and share vital and often time-sensitive critical patient data. They may be experiencing costs that might otherwise be channeled to more valuable activities. Let me explain some of these costs in detail in this post.

Looking beyond the “immaterial” cost of materials: A single CD-ROM can cost up to 19 cents1; so simply burning data on CDs and DVDs does not sound like a very expensive affair at all. Given the low media cost, the question is why should an organization replace an inexpensive process and invest in higher cost electronic sharing of images and reports?

Because ‘resources’ time is money:  Although CDs do not cost much physically, it may take approximately 15 minutes2 of resource time to burn, label and create a CD ready to be distributed to patients or clinicians. For complicated cases with long historical records and heavier images (e.g. Breast Tomography or PET-CT), it could be multiple CDs and DVDs creating much longer times. If your organization creates100 CDs per day, this can add up to almost 25 hours of staff resource time per day or nearly 6500 hours per year – time lost in just setting up and sifting through CDs. Even at a modest staff resource burden rate of $15/hr, the annual activity based cost could be ~$100,000!

In addition, factor in statistics that CDs don’t open 25% of the time3. In these situations, the CD creation process can get repeated. In other situations, the patient may get subjected to duplicate imaging which further results in unnecessary costs, radiation exposure and stress to patients, providers and payers.

That simple 19 cents suddenly becomes very expensive.

The cost of ‘urgencies’: When urgency strikes, costs simply go up. When patient images are immediately needed by specialists, organizations can use courier services such as Fed-ex™. Depending on distance and package size, the cost of shipments can range from $18 to $754. If we assume a simple 8 oz envelope, sent via the next day morning service, the cost is $42.854. In the above example, even if 10% of the 100 CDs created per day are Fed-ex’d out in this way, the annual cost could be $110K!

The hidden burden of duplicate imaging: It is estimated that as many as 53% of referrals may receive repeat imaging, with an average cost of ~$29855 per patient. At the same time, another research publication suggests that ~25% of the duplicate studies result from imaging or information technology reasons (inadequate imaging, CD inoperability, or unavailable images within the hospital’s PACS)6. If we estimate 1000 referrals per year, then these figures can translate to a total duplicate imaging cost of >$1.5M of which ~$0.39M may be avoided using efficient image sharing technologies.

And the hidden cost of trauma transfers: Trauma centers need to be well-equipped to deal with critical situations. When notified of a trauma case either from the trauma site or by the regional local ER, ambulances or helicopters can be dispatched to provide immediate care. Some publications suggest that the cost of handling one trauma can be as high as $59177. On the other hand, research reports indicate that not all trauma transfers are necessary. Often times, the trauma patient can be handled locally either without or with sufficient remote guidance. It is estimated that ~7%8 of the trauma transfers could be unnecessary which essentially suggest that for just 1000 trauma transfers per year, ~$400,000 of unnecessary expenses could be incurred

The cost of delays: What cannot be easily quantified is the value of speed, timeliness and convenience to patients, and primary care physicians that refer patients into multi-specialty organizations. A patient may travel for miles and hours simply to pick up a copy of their records, wait as the CD burns and sometimes repeat this process if the CD does not work at their appointment. A referring physician may wait for a day or several days to get a copy of the images and reports before instructing the patients on the next steps of treatment planning.

An effective, efficient opportunity to reduce costs:  Sharing and receiving patient images and reports electronically can help reduce some of the costs and burden to HCPs, patients, referrers and payers alike.  And while some of the challenges of sharing images and reports have been systems that ‘don’t talk to each other’, the advent of cloud based image sharing can help mitigate that obstacle.  Think of it – you can load images and patient data to the cloud and share them with anyone in your network – as opposed to spending time to load and move a CD again.  A simple, effective option for reducing costs of urgencies, duplicative imaging and trauma transfers.

I would love to know more about how you are working through the challenges and opportunities of patient image and data sharing – Can it really be as simple as a dynamic cloud based application like Centricity 360TM Case Exchange, or are there challenges we need to collectively overcome?  Write me and let’s start the new year solving this problem.




2.;; Kalia V, et al “Policies and procedures for reviewing medical images from portable media: Survey of radiology departments” J Am Coll Radiol 2011; 8: 39-48.Outside Imaging in Emergency Department Transfer Patients: CD Import Reduces Rates of Subsequent Imaging Utilization, Radiology, April 2011;


5.       Am J Surg. 2009 Dec;198(6):858-62. doi: 10.1016/j.amjsurg.2009.05.030. Trauma: the impact of repeat imaging; Haley T1, Ghaemmaghami V, Loftus T, Gerkin RD, Sterrett R, Ferrara JJ

6.       Sodickson, A et al. “Outside Imaging in Emergency Department Transfer Patients: CD Import Reduces Rates of Subsequent Imaging Utilization,” Radiology.2011;260(2):408-413; The American Journal of Surgery, December 2009, Trauma: the impact of repeat imaging

7.       University of California San Diego Health System research,  published in the September issue of the Journal of Trauma.

8.       Rapid Discharge After Transfer: Risk Factors, Incidence, and Implications for Trauma Systems, Hayley B. Osen, BA, Robert R. Bass, MD, Fizan Abdullah, MD, and David C. Chang, PhD, MPH, MBA

9.       Note : Calculations assume 260 working days in a year

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